Tokyo stocks fell sharply Thursday as investors offloaded shares after securing dividend rights before the end of the current fiscal year and locked in gains from recent highs.
The 225-issue Nikkei Stock Average ended down 594.66 points, or 1.46 percent, from Wednesday at 40,168.07. The broader Topix index finished 48.47 points, or 1.73 percent, lower at 2,750.81.
On the top-tier Prime Market, decliners were led by pulp and paper, land transportation, and iron and steel shares.
The U.S. dollar was subdued in the lower 151 yen range amid wariness over currency intervention by Japanese authorities, after government and Bank of Japan officials held an emergency meeting Wednesday following the yen's fall to a 34-year low to near the 152 line.
Stocks stayed in negative territory throughout the day on the selling of shares that went ex-dividend at the end of Wednesday's trading, with pension funds also carrying out rebalancing before the end of the current fiscal year, analysts said.
Investors also moved to lock in profits after the Nikkei surged to near its all-time high the previous day, particularly among exporters that gained ground in recent sessions on the back of a weakening yen, which boosts their overseas profits when repatriated.
"Exporters have become less attractive to buy with the Japanese government's talk of stemming the yen's fall," said Toshikazu Horiuchi, an equity strategist at IwaiCosmo Securities Co.
The market extended losses later in the day, as thin trading among many foreign participants ahead of closures in the U.S. and other overseas markets Friday for the Easter holidays added to the downward pressure.
"Japanese investors likely felt there is no rush to buy today due to the lack of activity from overseas," said Horiuchi.
